I often see teams struggle with aligning their development approaches
with the market strategy of how their product is going to be successful in
the marketplace. To be successful, a product must do something really well
that solves a particular set of problems that customers are willing to pay
for while at the same time it needs to solve other basic problems no worse
than the competition. Product teams need to know where they are aiming to be
“differentiating” and where they are aiming to be “good enough.” The Purpose
Alignment Model developed by Niel Nickolaisen is a simple tool that can
provide guidance to teams.

Niel suggests looking at a 2×2 matrix, with the Y –axis indicating where
you aiming to have true market differentiation (high) or where
differentiation is either not possible or simply not a focus of the
organization (low). The X-axis asks how Mission Critical it is.

Those items which are Highly differentiated in the market and which are
Mission Critical are Differentiating for the organizations.

There are items which are Mission Critical, but which do not
differentiate from the competition. For those items we say we aim for
Parity with the competition.

Some items may not be Mission Critical for the organization to own, but
still create differentiation in the market place. For those items we can
look to Partner with someone to create an overall
differentiated offering.

Lastly, there are items which are neither Differentiating nor Mission
Critical. We need to ask ourselves why these are even being considered. We
call these items Who Cares and challenge proponents of
these features to justify the movement into one of the other quadrants.

Let’s take a look at an Example using Apple Computer and how they have
been successful:

Apple has always prided itself on its ability to come up with new
products that emphasize design and overall user experience. These are areas
where they have consistently excelled. Over time they got into content
distribution with iTunes and the App Store. These as well provided them with
differentiation.

While in the early days Apple was based on Motorola chips, over time they
realized that they were no longer differentiated and actually behind the
market. First they recognized a need to have Microsoft Office on the Apple
platform and made an arrangement to be on par with Windows. Similarly they
made the switch to Intel hardware as well to keep up.

In the early days of the iPhone Apple knew that they had a competitive
differentiator but also saw an opportunity to create a differentiated
partnership with ATT. Apple had no need or ability to have their own
cellular network, but created a differentiated partnership that provided
value to both Apple and ATT.

Lastly, there are some areas that effectively became commodities such as
printers and other peripherals. Apple used to have their own line, but it no
longer makes sense.I will leave you with a few questions to ponder:

Do you know how your product is differentiated in the market?

Are you treating some features as though they are differentiated but
just need to be at parity?

Are you working on features that are really neither differentiated
nor mission critical?